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Economy & Your Money

US stocks plunge as investors fear Democrats will slow AI data centers

The Nasdaq fell about 5% and chip stocks led the losses, a day after the Dow jumped more than 1,500 points on election results.

14 news outlets reported this
Liberal5 outletsAI selloff after the Democratic midterm winsCenter3 outletsTech leaders, Musk and data centres in focusConservative6 outletsRecord market value losses after the Democratic sweep
Published 3 min readMoney and daily life
Overview

US stocks fell sharply on Thursday, a day after a rally that followed Democratic wins in Tuesday's elections. Investors worried that Democratic control of and key governorships would slow construction of the data centers that power artificial intelligence. The Nasdaq Composite fell roughly 5% and entered correction territory, meaning it dropped more than 10% from a previous peak.

The S&P 500 and the Dow also sank, erasing much of Wednesday's gains, when the Dow had jumped more than 1,500 points. Chip and data center companies were hit hardest, among them Nvidia, AMD and CoreWeave. Tesla and SpaceX, both tied to Elon Musk, also dropped sharply.

Musk had spent heavily backing Republican candidates. Voters backed restrictions in most data center , and Texas governor-elect Gina Hinojosa campaigned for a moratorium on new construction. UBS analysts estimated that possible construction pauses could put roughly 30% of planned US data center capacity additions in 2028 at risk.

NBC News reports that weak earnings from Qualcomm and Arm on Wednesday night also set off selling. ABC News reports that OpenAI announced new data center policies, including a pledge to bear the cost of the power and infrastructure its facilities use.

Key figures
  • 5.5 percent Nasdaq Composite's drop at the close, per the Daily Mail — Daily Mail
  • 4.3 percent S&P 500's drop at the close, per the Daily Mail — Daily Mail
  • 1,833 points Dow's drop, per the New York Post — New York Post
  • $374 billion Nvidia's lost market value, per the New York Post — New York Post
  • roughly 30 percent planned 2028 US data centre capacity additions at risk, by UBS analysts' estimate — Al Jazeera English

Three sides of the story

Liberal5 outlets

AI selloff after the Democratic midterm wins

CBS News opens with a market that "tanked" over fears that a change in congressional control could slow data center building, and quotes Capital Economics' Joe Maher saying the AI boom is in its "final innings." Al Jazeera ties the drop to voters backing restrictions in 39 data centre ballot measures, cites the UBS estimate, and details Musk's election spending and the hit to Tesla and SpaceX. ABC News headlines the Dow's drop and the Nasdaq's entry into correction, quotes Yorkville's Dan Ives calling the Democratic wins a "seismic shift," and reports OpenAI's new data center pledges.

NBC News points to weak Qualcomm and Arm earnings as the trigger alongside the midterm results. It quotes Ed Yardeni describing "an AI bubble losing some air very, very rapidly."

Center3 outlets

Tech leaders, Musk and data centres in focus

BBC News leads with Musk's SpaceX shares plunging as tech and AI stocks fell. It notes Musk spent nearly $450m backing Republican campaigns and that Texas governor-elect Gina Hinojosa pledged a moratorium on new data centres. It quotes Wealth Club's Susannah Streeter on "fresh panic over the AI trade" and reports OpenAI's Greg Brockman and Meta's Dina Powell McCormick saying the industry must explain data centres better.

UPI's short wire report has the Nasdaq down nearly 5% and the Dow down 1,000 points after Wednesday's jump. It says investors view the drop as a correction and that Democrats are expected to bring more scrutiny to AI. Forbes's headline says fintech companies such as Robinhood and Dave are dropping faster than the broader market as investors rotate out of AI and energy stocks.

Conservative6 outlets

Record market value losses after the Democratic sweep

The New York Post leads with record single-day market value losses, reporting Nasdaq companies lost $2.5 trillion and Nvidia shed $374 billion. The Post Millennial's headline says Democrats "vow to halt AI," and it quotes Rep. Yassamin Ansari and Sen. Bernie Sanders calling for pauses on advanced AI development. The Daily Mail describes a "bloodbath" and quotes analysts Jakub Rochlitz and Nic Puckrin, who calls the election "the gust of wind" that toppled a shaky market.

It adds Musk's paper losses, record margin debt and Trump's Truth Social post about stocks. Breitbart's "AI Massacre" report gives a sector-by-sector breakdown. It says data center measures appeared on ballots in at least 41 jurisdictions and voters approved moratoriums or restrictions in 40 of them.

Breitbart calls the midterms the "AI election."

Money and daily life

The Daily Mail, citing Fed data, says stocks now make up a record 48 percent of American households' financial assets, against 38.7 percent at the dot-com bubble's peak. The paper says professionals and the of regular Americans face $2.5 trillion in paper losses. It also reports that Democratic leaders list protections against rising electricity bills among their priorities.

All sources: 16 articles from 14 outlets

Liberal (5)

Center (3)

Conservative (8)

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1 min
Midterm elections

US elections halfway through a president's four-year term. The whole House, a third of the Senate and many governors are elected. In 2026 Election Day is November 3.

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Congress

The US parliament: the Senate and the House of Representatives. A bill becomes law when both pass it and the president signs it.

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Ballot measure

A law or constitutional change that voters approve or reject directly at the polls, alongside the candidates. Names vary by state: proposition, initiative, referendum, amendment.

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Wall Street

A street in New York where the stock exchange stands. In the news it means US financial markets and the big banks and investment firms as a whole.

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Retirement savings accounts with tax breaks. A 401(k) comes through an employer, which often adds money of its own, and an IRA is opened by the saver. Taking money out before age 59½ brings a penalty.

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